For a Given Supply Curve, How Does the Elasticity of Demand

question 168

Multiple Choice

For a given supply curve, how does the elasticity of demand affect the burden of a tax imposed on a product?

• A)The excess burden of the tax will be minimized when the demand is unit elastic.
• B)The excess burden of the tax will be greater when the elasticity of supply is greater than the elasticity of demand.
• C)The excess burden of the tax will be greater when the demand is less elastic than when it is more elastic.
• D)The excess burden of the tax will be greater when the demand is more elastic than when it is less elastic.

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Definitions:

Shareholders

Individuals or entities that own shares in a corporation, thereby holding a portion of the company's equity and potentially receiving dividends.

Supermajority Amendment

A requirement for a significantly higher than simple majority vote, often used in changes to corporate charters or government constitutions.

Poison Pill Amendment

A strategic defense tactic used by companies to prevent or discourage unwanted takeover bids by making the company less attractive to the potential acquirer.

Shareholders

Individuals or entities that own shares in a corporation, giving them ownership interests and possibly voting rights.